Chinese firm CITIC Group has overtaken Towers Watson as lead bidder for Russell Investments, according to a Reuters report published last week.

Reuters says CITIC could pay about US$1.8 billion for the Russell investment and consulting business, which current owner the London Stock Exchange (LSE) officially put on the market this February.

“The negotiations are ongoing and the deal could still fall through, according to the sources, all of whom wished to remain anonymous because they are not permitted to speak to the media,” the Reuters story says.

“… It is unclear how the current stock market volatility in China may affect the deal, two of the people said.”

A source cited by Reuters said the recently-announced merger of Towers Watson with insurance broking giant Willis would make it “difficult for Towers to proceed with an acquisition of Russell”. However, a story originally published on Australian industry website, Investor Strategy News, last week says the Towers Watson/Willis hook-up would not preclude a takeover offer for Russell.

The Towers/Willis merger “will increase available cash in the combined business to about US$2 billion, which is thought to be ample to acquire Russell Investments without increasing debt or issuing shares”, the story, also published on Investment News NZ (IN NZ), says.

Towers Watson, along with CITIC and another Chinese firm, Shanda Group, described by Reuters as “an investment holding group that started out as an online game company”, were reportedly the three remaining bidders for Russell Investments.

The Beijing-based CITIC has already established a foothold in the US financial services market with CITIC Asset Management.

The LSE has been seeking to offload the Russell Investments unit, with reported global funds under management of about US$272 billion, since February this year after purchasing the wider Frank Russell business in 2014 for about US$2.7 billion.

LSE bought Russell primarily for its index business, which it has subsequently merged with its existing FTSE index business to form ‘FTSE Russell’.

“FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 80 countries, covering 98% of the investable market globally and trading on over 25 exchanges worldwide,” the LSE May press release announcing the new index brand says.